Home Buyers Guide – Buying your First Home

This Home Buyers Guide will help First Time Home Buyers realize their goal. Most adults in North America consider Buying a Home a Defining Goal in their life.  Owning your own home offers a sense of stability and says to the world, I am an adult. There are many risks involved in owning a home, as we all saw what happened to the market in the 2008 financial crisis, and recently the slump in Alberta real estate.  In Southern Ontario the rapid rise in home prices will have wiped out potential home buyers savings for a down payment. Here is some advice for home buyers which will help them stay on the right track to home ownership:

Home Buyers Guide – Key Items

Purchasing a home may be the largest investment you ever make. Prior to your starting to look for a home, make a list. You should be pre-approved for a mortgage prior to starting your hunt of a home, next, a checklist with your requirements and preferences for a home.

Detailing your must-haves and nice-to-haves will come in handy when the house-hunting process becomes repetitious and you need to stay on track.

Home Buyers Guide – Know Your Budget

The Home Buyers Guide recommends you  collect and put together every piece of information you can on your financial picture. Common items are your savings, mandatory monthly expenses, discretionary spending, debts, investment accounts and more. Understanding these items allows you to create an accurate plan for how much you can afford when buying a home.  While saving up for that down payment, review your budget to adjust your plan to help reach your goal.

Save for Your Down Payment

Your goal should be to save up a minimum of 20% of purchase price which will not require you to purchase mortgage insurance.  In Southern Ontario’s hot real estate market a first time home buyer would have saved considerable amount of money if they had jumped into the market early and paid the mortgage insurance, allowing them to save quite a bit on the purchase price of a home.  This type of financial reasoning is not for the faint of heart and could have future reprecussions.

Minimum down payment requirements:

• For homes that cost up to $500,000, the minimum down payment is 5%
• For homes that cost more than $500,000 and less than $1 million, the minimum down payment is 5% of the first $500,000 plus 10% of the remaining balance
• For homes that cost $1 million or more, the minimum down payment is 20%

Know your Credit Rating 

The Home Buyers Guide recommends you contact your Bank to set goals to improve your Credit Rating if needed.  In Canada, credit scores range from 300 to 900. … You don’t need to have perfect credit to get a mortgage. In fact, as long as your credit score is in the 600-700 range , it should satisfy the credit requirements for your mortgage application with one of Canada’s main financial institutions.   The credit score required to get approved for a mortgage in 2021 also depends on several other factors associated with the borrower. For example, a borrower with a high income and low debt amount might be able to get away with a slightly lower credit score than a borrower with a lower income and lots of debt.

Mortgage Options – Pre-Approved for Home Loan

Banks, credit unions, and mortgage companies – all offer different mortgage options. Do your homework with each of these different lenders before you choose the one to finance your purchase.  Many real estate agents will require you to be pre-approved for a mortgage before they invest a lot of time showing you properties. This pre-approval puts the realtor in a position to know exactly how much house you can afford and also improves negotiation with your offer to the seller because it means that a bank is already willing to lend you the money, improving the likelihood of closing the sale.

Find a Good Realtor

Personal references from friends who have used a particular Realtor are usually your best bet.   Also do you want a Individual Realtor or a Team Realtor to represent you?  Idealy you want someone who will put you and your families needs first,  not the eventual commission they will receive.  A good Realtor will steer you away from possible Money Pits or that famous Lipstick on a Pig type of property.  Barrie’s Best Real Estate Agents is a respected website that lists Professional Realtors who have proven themselves a Local Real Estate Experts.

Hire Your Own Home Inspector

Research, ask questions, ask your friends and read reviews before hiring a Home Inspector.   The person you hire as your Home Inspector is likely the only person standing between you and what could be the biggest mistake of life.   Electrical Panel Defects can cost thousands of dollars to the unwary purchaser.  Plumbing Defects or poorly installed plumbing can also be a very expensive repair. Kitec Plumbing was installed in many homes and condominiums. Kitec plumbing requires replacement which can be very expensive. Shingled roofs will last approximately 15 years and are fairly expense to replace. As a professional Home Inspector in Barrie my philosophy towards Real Estate Agents is fairly simple.  If you don’t want me to tell my clients that the home they are thinking of buying is a poor choice, don’t try and sell them a home with so many problems.  My only allegiance to my clients – never the Real Estate Agent.

List of Items Covered in your Home Inspection

 Standards of Practice of Barrie Home Inspector

3.1.  Roof
3.2. Exterior
3.3. Basement, Foundation, Crawlspace & Structure
3.4. Heating
3.5. Cooling
3.6. Plumbing
3.7. Electrical
3.8. Fireplace
3.9. Attic, Insulation & Ventilation
3.10. Doors, Windows & Interior

For answers to any questions call Roger Frost today   705-795-8255